RELATIONSHIP BETWEEN SOCIAL CAPITAL AND

IJRRAS 21 (2) ● November 2014 www.arpapress.com/Volumes/Vol21Issue2/IJRRAS_21_2_01.pdf

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RELATIONSHIP BETWEEN SOCIAL CAPITAL AND

ORGANIZATIONAL ENTREPRENEURSHIP

(Case Study: Islamic Azad University of Kermanshah)

Babak Jamshidinavid1, Mojtaba Chavoshani2 & Farzad Parse3 1Department of Accounting, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran

2Department of Accounting, Ghasr-e-Shirin Branch, Islamic Azad University,Ghasreshirin, Kermanshah, Iran 3Department of Language, Ghasr-e-Shirin Branch, Islamic Azad University,Ghasreshirin, Kermanshah, Iran.

Corresponding author: Mojtaba Chavoshani , Email: [email protected]

ABSTRACT

Nowadays, according to the extent and variety of changes inflicted on the body of the organizations, they have found

to deal with the changes that so have faced, They Should be associated with the new compounds of their existing

resources to provide new competitive advantages and this is why the importance of creative staffing and innovative

human resources and the entrepreneurs of organization have become more prominent. Since university education as

the main custodians of HR professionals play a vital role in society, entrepreneurship consideration in this matter will

help the organization to develop better and in the meantime, the social capital and pay special attention to it, is a

crucial factor in achieving organizational goals and in order to promote and facilitate the organization of programs is

important which the processes of innovation, creativity and collective learning are affected by it , and it's easy to

achieve .This study is about relationship between the social capita and entrepreneurship in Islamic Azad University

of Kermanshah. Staff and faculty members of Islamic Azad University of Kermanshah have formed Statistical Society

in this study. And among them, 210 persons are selected as the study sample. Analysis of the research model and

hypotheses testing were performed by using structural equation approach , as well as, confirmatory factor analysis and

Path analysis diagram was performed by using LISREL software , and the results showed that there is a significant

relationship between social capital (Structural, cognitive and relational) and entrepreneurship.

KEYWORDS: Social capital, Organizational entrepreneurship, Entrepreneurial University, Islamic Azad

University of Kermanshah.

1. INTRODUCTION

World in the late twentieth century has witnessed massive changes in all areas of the business, where the concepts

like globalization, Increasing competition, the development of information technology, knowledge explosion and the

like organizations are made to deal with these changes. Turning to entrepreneurship is the main solution to deal with

these changes, which is recognized as a key factor in economic growth and development in the modern age, and

organizational flexibility and the strategy of continual change processes. products and projects are the main

advantages of entrepreneurial organizations. Therefore entrepreneurship does not a meaning of job contrary to its

appearance, but the entrepreneur can be any person or organization as a mechanism to dealing with changes and the

manifestation of ideas to reality. Naturally promoting a culture of entrepreneurship in a society requires purposeful

planning and continuing education of personnel at all levels, so the role of universities is important as the main

custodians foster creative and innovative human capital, Therefore there is a great need of academic entrepreneurship. Most of the research into entrepreneurship are the type of the personality characteristics of entrepreneurs and the type

of structural and environmental status, it has been criticized for the lack of attention in the network of social relations

(Social Capital), this means that non-economic factors. The element Cognitive social capital referring to the resources

that provide symbols, interpretations, and systems of shared meanings among groups. The most important aspects are the following: Language, codes and the shared anecdotes (Rhodes, et al, 2008). Nowadays, Entrepreneurship from the

perspective of social scientists is a process of social network that is located in a network of social relations, but the

association of social relationships can facilitate or limit the entrepreneur relationship with the resources and

opportunities. This concept refers to the links, the links between members of a network as a valuable resource, that

causes achieving the goals of its members only by creating norms and mutual trust. In this study we have attempted

to introduce the constituent dimensions of social capital and entrepreneurial organization with an emphasis on the

characteristics of the entrepreneurial university, now Let us examine these two issues in Islamic Azad University of

Kermanshah.

mailto:[email protected]

IJRRAS 21 (2) ● November 2014 Jamshidinavid et al. ● Capital & Organizational Entrepreneurship

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2. LITERATURE

Beugelsdijk and Schaik with a cross-sectional study in 54 states of Europe, Examined the relationship between social

capital and economic growth for the period 1950 and 1990 in Europe. There is a significant the relationship between

economic growth and active members of groups based on their results. Lean Non and Santos (2007) concluded of their

study as Does social capital has an impact on the intention of entrepreneur? They have reached the conclusion that

impact of Social factors and new economic of Social Capital will creat entrepreneurship intentions. Using partial least

squares (PLS) Select the method to data from undergraduate students, According to their study, the Results indicate that with increasing social capital the tendencies are forward to establishment of companies and entrepreneurs.

Mark, et al (2009), have examined the relationship between social capital (Relational, cognitive), Entrepreneurship,

team effectiveness and team performance In their research, as The Role of Social Capital efficient team on the

performance of the team entrepreneurship. Data were collected through an online survey of students, members of a

project team and their results showed that perceptions of social capital in the form of relational capital, cognitive

capital for entrepreneurship leads to a significant positive predictor in the team effectiveness. Sari Livonen, et al

(2010) in their study as Social capital and entrepreneurial behavior and promote innovation for Interaction between

researchers and small entrepreneurs in rural , that In this study they have used the theoretical concepts of social

approach which it is the combination of social capital and entrepreneurial behavior . This study was conducted to

their work on food production in the south of Finland. As a result of interviews with 15 groups of entrepreneurs had

been assumed by Phenomengraphic way. It was found that the key stimulus collaborations between entrepreneurs and

researchers are embedded in the common understanding. Entrepreneurial behavior and training is a confidence-

building process. The results indicate that researchers are requiring rural entrepreneurs in order to pave the way for

the promotion of innovation. Petrou and Daskalopoulou (2013) examined the relationship between social capital and

innovation in their study as Social capital and innovation in the service sector and tourism industry of Greece. And

their results show that there is a strong relationship between social capital and innovation with relying on knowledge

management. Rothaermel, et al (2006) believe that an integrated the entrepreneurial culture Professors can be the

most important of engine development of an entrepreneurial university alongside a strong executive and motivated

Who have a history of entrepreneurship. Patel and Conklin (2009) believe that Social Capital Resources is a energy or

power that shapes the structure of economic factors and focuses on a specific purpose in a social context.

In today's business world, most value-based corporate assets are Intangibles. It is vital and important for organizations

have the ability to identify and estimate the source of the value. In order to enable the management of social capital,

we need to identify its origin and knowing how to create these assets in our organization (Frits and Leana).

So one of the factors in opportunity identification is social capital, which includes social networks .In fact, these

networks are facing entrepreneurs with the more resources and opportunities and And expand the circle of his chosen

(Bhagavatula, et al 2010).

Ghoshal and Nahapy Placed in three different aspects of social capital with organizational approach: Cognitive capital,

structural capital and relational capital (Sabatini, 2008).

Whatever social networks become more widespread entrepreneurship, further opportunities are identified. One of the

factors in opportunity identification is social network. These networks are facing entrepreneurs with the resources and

opportunities so it expand circle of their choice (Batjargal 2010). In recent years regarding the role of entrepreneurs

in economic growth and industrial, As well as with regard to the problems and limitations particularly unemployment

in the field of industrial development and economic, Is necessary to promote the development of entrepreneurship

widely (Ardichvili, et al).

3. RESEARCH HYPOTHESES

3.1. The main hypothesis

There is a significant relationship between social capital and entrepreneurship in Islamic Azad University of

Kermanshah.


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3.2. Secondly hypothesis

1- There is a significant relationship between Structural capital and entrepreneurship in Islamic Azad University

of Kermanshah.

2- There is a significant relationship between Cognitive Capital and entrepreneurship in Islamic Azad University

of Kermanshah.

3- There is a significant relationship between Corporate Entrepreneurship and bringing Capital in Islamic Azad


4- There is a significant relationship between social capital and Entrepreneurial Organization in Islamic Azad


5- There is a significant relationship between social capital and Shared vision and Providential Strategy in

Islamic Azad University of Kermanshah.

6- There is a significant relationship between social capital and Interaction with the environment in Islamic

Azad University of Kermanshah.

7- There is a significant relationship between social capital and Entrepreneurial corporate culture in Islamic

Azad University of Kermanshah.

3.3. Society and Statistical sample

This study is covering the statistical population and all of the academic members and staff of Islamic Azad University

of Kermanshah. And according to reports, this number takes the 230 academic member and 265 members of staff.

Because the statistical population is limited in the present study, the finite population is used to determine the sample

size for biopsy and Cochran formula is as follows:

So, p=0.5, q= 0.5, N= 495 and Z= 1.96

Therefore the sample size that should be selected of whole levels is equal 210.

4. METHODOLOGY

Since the goal of the present study was to determine the relationship between social capital and Entrepreneurship,

therefore the aim is Functional and the process of data collection is descriptive and is the correlation type.

To check the status questionnaire from the mean test of the society (T an example) and to evaluate the correlation

between research variable Pearson's correlation coefficient was used. Confirmatory, factor analysis is used at the analysis of this study to significance test relations between questions and the variables and the fit of the measurement models and assess the validity. Finally in order to evaluate the effects of research variables used structural equation

modeling (SEM), and LISREL software is used at Path analysis technique specifically.

4.1. Structural model to test the hypothesis

The effect of social capital on entrepreneurship is 0.84 and it’s significantly is 10.15. (Approval)

The null hypothesis and one to confirm or refute the hypothesis is as follows:

H0 = There is no significant correlation between the two variables.

H1= There is a significant correlation between the two variables.

If the significant number (Coefficient of T) be greater than 1.96 in regression test, the null hypothesis Will be rejected

and one Will be verified, and conversely.

In the test hypotheses by using structural equation modeling, firstly, the software output indicates that the structural

model fitted to test the hypothesis. (X ratio to df is less than 3). Amount of RMSEA = 053.0 which indicates that the

structural model is fitted. In other words, it has been observed this has largely consistent with the conceptual model.

Amount of GFI, A GFI, NFI, Respectively equivalent to 91.0, 78.0, 93.0 which indicates a good fit of the model. All

model fitting parameters are discussed in the more:

Normed Fit Index= 0.93

Goodness of Fit Index (GFL) = 0.91

Adjusted Goodness of Fit Index (AGFI) =0.87


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Table 1. Confirm or reject the main hypothesis

Approval or rejection Significant The effect Research hypotheses

Approval

10.15

0.84

social capital on

entrepreneurship

4.2. Structural model to test the hypothesis 1, 2 and 3

The following structural model is explained and tested in the semantically coefficient estimates and standard secondary

hypotheses 1, 2, 3

1- There is a significant relationship between Structural capital and entrepreneurship in Islamic Azad University of

Kermanshah.

2- There is a significant relationship between Cognitive Capital and entrepreneurship in Islamic Azad University of

Kermanshah.

3- There is a significant relationship between Corporate Entrepreneurship and Briging Capital in Islamic Azad


as was calculated:

The effect of structural capital and entrepreneurship is 0.39 and its Significantly is 4.75.( Approval)

The effect of cognitive capital and entrepreneurship is 0.52 and it’s significantly is 5.12. (Approval)

The effect of bridging capital and entrepreneurship is 0.22 and it’s significantly is 1.96. (Approval)

The null hypothesis and one to confirm or refute the hypothesis is as follows:

H0 = There is no significant correlation between the two variables.

H1= There is a significant correlation between the two variables.

If the significant number (Coefficient of T) be greater than 1.96 in Regression test, the null hypothesis Will be rejected

and one Will be verified, and conversely.

Table 2 shows an overview confirm or refute Research hypotheses:

Table 2. Examine the hypotheses 1, 2, 3


Approval

Approval

Approval

4.75

5.12

1.96

0.39

0.52

0.22

Structural capital on

entrepreneurship

Cognitive capital on entrepreneurship

Corporate Entrepreneurship


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In the test hypotheses by using structural equation modeling, firstly, the software output indicates that the structural model fitted to

test the hypothesis. (X ratio to df is less than 3). Amount of RMSEA= 062.0 which indicates that the structural model is fitted. In

other words, It has been observed this has largely consistent with the conceptual model. Amount of GFI , A GFI , NFI Respectively equivalent to 91.0 , 85.0, 90.0 which indicates a good fit of the model. All model fitting parameters are discussed in the more:




4.3. Structural model to test the hypothesis 4, 5, 6 and 7 The following structural model is explained and tested in the semantically coefficient estimates and standard secondary hypotheses

4, 5, 6, 7.

4- There is a significant relationship between social capital and Entrepreneurial Organization in Islamic Azad University of

Kermanshah.

5- There is a significant relationship between social capital and Shared vision and Providential Strategy in Islamic Azad University

of Kermanshah.

6- There is a significant relationship between social capital and Interaction with the environment in Islamic Azad University of

Kermanshah.

7- There is a significant relationship between social capital and Entrepreneurial corporate culture in Islamic Azad University of

Kermanshah.

The effect of social capital on Entrepreneurial Organization is 0.86 and it’s significantly is 12.14. (Approval)

The effect of social capital on Entrepreneurial corporate culture is 0.61 and it’s significantly is 9.07. (Approval)

The effect of social capital on Interaction with the environment is 0.70 and it’s significantly is 10.23. (Approval)

The effect of social capital on Shared vision and Providential Strategy is 0.73 and it’s significantly is 9.86. (Approval)

If the significant number (Coefficient of T) be greater than 1.96 in regression test, the null hypothesis will be rejected and one will

be verified, and conversely.

Table 3. Examine the hypotheses 4, 5, 6, 7


Approval

Approval

Approval

Approval

12.4

9.07

10.23

9.86

0.86

0.61

0.7

0.73

social capital on Entrepreneurial

Organization

social capital on Entrepreneurial corporate culture

social capital on Interaction with the environment

social capital on Shared vision


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In the test hypotheses by using structural equation modeling, firstly, the software output indicates that the structural model fitted to

test the hypothesis. (X ratio to df is less than 3). Amount of RMSEA= 053.0 which indicates that the structural model is fitted. In

other words, it has been observed this has largely consistent with the conceptual model. Amount of GFI, A GFI, NFI Respectively equivalent to 95.0, 90.0, 93.0 which indicates a good fit of the model. All model fitting parameters are discussed in the more:




5. RESULTS

In the this study based on the literature research and existing models In this area, The conceptual model was tested to

evaluate the role of social capital on corporate entrepreneurship in Islamic Azad University of Kermanshah, and

hypotheses research based on the hypothesized relationships tack placed in the testing model. Formulated hypotheses

were tested by using confirmatory factor analysis and hypotheses were confirmed with certainty 0.95 and the test of

proposed model was conducted and Path coefficients were examined by using SEM structural equation modeling.

5.1. The results of the hypotheses

In general, to evaluate models designed in social capital and entrepreneurial organization LISREL software is used.

To evaluate the performance of the model compared to other models used the fitness index values (NFI), Relative fit index (RFI), increasing the fitness index (IFI), and Comparative fitness index (CFI). Values above 0.9 indicate a good

fit of designed model in comparison with other existing models.

5.2. Results of structural equation modeling

Lisrel output models in explaining the structural equation analysis of the impact of social capital on corporate

entrepreneurship (secondary hypotheses 1, 2, 3) has the highest impact factor of 0.52 times the standard estimates in

the second order factor analysis of the cognition of capital social, and Placed a priority and it has the greatest impact on entrepreneurship. Then social capital and structural factor loading 0.39 and finally the relationship of social capital

with a load factor of 0.22 has the least impact on the dimensions of social capital on organizational entrepreneurs.

Significant coefficients in the second order factor analysis show a significant coefficient for the hypothesized.

So Lisrel output models in explaining the structural equation analysis of the impact of social capital on corporate

entrepreneurship (secondary hypotheses 4, 5, 6,7) is the priority for the standard estimate of the second-order factor

analysis of the impact of social capital on different aspects , to arrange with the impact of social capital on

entrepreneurial organization with a load factor of 12.4 and the impact of social capital on continuous interaction with

the environment with the load factor of 10.3, and the impact of social capital on entrepreneurial corporate culture

with a factor loading of 9.86, Finally, the impact of capital on a shared vision and providential strategy has 9.07 load

factor. Significant coefficients in the second order factor analysis show a significant coefficient for the hypothesized.


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Table 4. The results of the research hypotheses

Test

results Significant The effect Text of the research hypotheses Hypothesis

confirmation

confirmation

confirmation

confirmation

confirmation

confirmation

confirmation

confirmation

10.15

4.75

5.12

1.96

12.4

9.07

10.23

9.86

0.84

0.39

0.52

0.22

0.86

0.61

0.7

0.73

There is a significant relationship between social capital and

entrepreneurship in Islamic Azad University of Kermanshah.

There is a significant relationship between Structural capital and


There is a significant relationship between Cognitive Capital and


There is a significant relationship between Corporate Entrepreneurship

and Briging Capital in Islamic Azad University of Kermanshah.

There is a significant relationship between social capital and

Entrepreneurial Organization in Islamic Azad University of Kermanshah.

There is a significant relationship between social capital and Shared vision

and Providential Strategy in Islamic Azad University of Kermanshah.

There is a significant relationship between social capital and Interaction

with the environment in Islamic Azad University of Kermanshah.

There is a significant relationship between social capital and Entrepreneurial corporate culture in Islamic Azad University of

Kermanshah.

main

first

second

third

fourth

fifth

sixth

seventh

5.3. The results of the mean test

In the mean test, the status of social capital in Azad University indicates that the different dimensions of social capital,

which includes aspects of structural, cognitive and relational , in the event that structural and relational capital

structure are in good condition, although the cognitive dimension of social capital in the confirmatory factor analysis

which has the greatest impact on entrepreneurship in universities but its situation has not evaluate in a satisfactory

condition according to the t-statistics which located in the critical area.

As well as, Status of Entrepreneurship in the mean test shows that entrepreneurial organizational structure has been

assessed at an average level, and other aspects are improper that encompass the shared vision and strategy providential,

continuous interaction with the environment and entrepreneurial corporate culture. In general, a variable rate of

entrepreneurship (dependent variable of research) is viewed unfavorably in Islamic Azad University of Kermanshah.


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5. CONCLUSION

The results of this study led to the identification and examination of social capital and entrepreneurship at the

University, and findings from confirm the factor the appropriateness of the model components and it shows their

impact on the views of staff and faculty members. Accordingly, terms of social capital and its dimensions can be

considered as a key factor in strengthening corporate entrepreneurship. Results indicated that, performance of

university could not impress dimensions of entrepreneurship at an acceptable level, in the context of collaborative

management, teamwork, orientation toward collective goal, collaborative activities with colleagues and sharing of

resources, despite their high impact entrepreneurship. Results indicated that, The Entrepreneurship Organizational has

been rated as unsatisfactory at the University and to solve this problem, must perform the basic actions, in order to

strengthen social capital and the enhancement of social capital within the framework Entrepreneurship Organizational.

Obviously, the morality of team working should cleave the boundaries of conventional in the organization, and should

join the value chain of the organization and groups of the united organization.

ACKNOWLEDGEMENTS We thank the Islamic Azad University, Kermanshah Branch, who has been supportive of this project.

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Figure 1. model coefficients estimated in the standard

Figure 2. model coefficients is meaningful


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RELATIONSHIP BETWEEN SOCIAL CAPITAL AND